Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : New home sales set record high, but ...

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November 29, 2005

New home sales set record high, but ...

not everyone is overly excited about it. The important factor, the prices of new homes have flattened. What it means is that builders having smaller profits as cost of labor and building materials has risen significantly, will likely build even more units, trying to compensate for each unit price decrease. And eventually, it will lead to even lower prices. Sounds wrong? Will see ...

More importantly, the record sales were due mostly to the increased sales in less expensive South of the country, where number of new homes sold, jumped roughly 27 percent from October 2004 to October 2005. Western region also registered higher numbers by about 9 percent.

However, Midwest and Northeast sales dropped by about 19.8 percent and 16.5 percent respectively.

So, you have to read the headlines with a grain of salt. I think that many areas have been simply overbuilt. Is there still demand for the housing? Sure, you can see the huge number of rental vacancies and realize, that many people are still buying. But to deny that there has been an overall slowdown in housing market is quite silly. And this slowdown still have some room to grow, in my opinion.

 
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